The Indian equity market ended on a flat note on Friday despite better than expected quarterly earning from IT bellwether Infosys and narrowing trade deficit data. Infosys bottom line soared by 21% sequentially to US$463mn, on better control on operating costs. The company grew its revenues in dollar terms by 1.7% compared to the Q2. Infy added 54 new clients in the quarter and have added 15 clients where the deal size is over US$100mn. Infosys also improved its utilisation from 73.7% in the second quarter to 74.1%.
Commenting on the same, Amar Ambani, Head of Research at IIFL said, “ Infosys Q3 FY14 results were healthy characterized by significant margin (27.6% v/s expected 27.1%) and bottomline (Rs. 28.75bn v/s expected Rs. 27.5bn) beat. Driven by various cost rationalization initiatives, the operating margin improved by impressive 170bps qoq. The scope for further margin improvement remains significant as efficiency initiatives continue and utilization continues to improve in a accelerating revenue growth environment.FY14 dollar growth guidance upgrade was in-line with our expectations to 11.5-12%. There is also a marked improvement in management commentary which is reassuring. We remain positive on the stock and have upgraded earnings estimates for FY14/15.”
India's trade deficit widened in December, but imports continued to fall, driven by curbs on gold. The trade deficit stood at US$10.14bn compared with US$9.22bn in November. However, trade deficit for December eased significantly on a year-on-year basis. Merchandise exports rose 3.49% yoy to US $26.35bn, slowing down from a 5.86% pace in November. Imports fell 15.25% yoy to US$36.49bn led by a 68.83% yoy drop in gold and silver imports.
On the currency front, the rupee hit a one-week high of 61.94 on Friday, its highest since January 2. The pair was trading at around 61.98/99 versus its close of 62.07/08 on Thursday, tracking broad losses in the dollar versus other major currency.
The Reserve Bank of India (RBI) was in action during this week. The apex bank announced that it revised the loan-to-value (LTV) cap for gold loan non-banking financial companies (NBFCs) to 75% this quarter from 60%. Muthoot Finance further gained by 7% and Manappuram surged higher by 15%.
Finally, BSE Sensex closed at 20,758 up 45 points, while NSE Nifty closed at 6,171 up 3 points over the previous close.
Commenting on the same, Amar Ambani, Head of Research at IIFL said, “ Infosys Q3 FY14 results were healthy characterized by significant margin (27.6% v/s expected 27.1%) and bottomline (Rs. 28.75bn v/s expected Rs. 27.5bn) beat. Driven by various cost rationalization initiatives, the operating margin improved by impressive 170bps qoq. The scope for further margin improvement remains significant as efficiency initiatives continue and utilization continues to improve in a accelerating revenue growth environment.FY14 dollar growth guidance upgrade was in-line with our expectations to 11.5-12%. There is also a marked improvement in management commentary which is reassuring. We remain positive on the stock and have upgraded earnings estimates for FY14/15.”
India's trade deficit widened in December, but imports continued to fall, driven by curbs on gold. The trade deficit stood at US$10.14bn compared with US$9.22bn in November. However, trade deficit for December eased significantly on a year-on-year basis. Merchandise exports rose 3.49% yoy to US $26.35bn, slowing down from a 5.86% pace in November. Imports fell 15.25% yoy to US$36.49bn led by a 68.83% yoy drop in gold and silver imports.
On the currency front, the rupee hit a one-week high of 61.94 on Friday, its highest since January 2. The pair was trading at around 61.98/99 versus its close of 62.07/08 on Thursday, tracking broad losses in the dollar versus other major currency.
The Reserve Bank of India (RBI) was in action during this week. The apex bank announced that it revised the loan-to-value (LTV) cap for gold loan non-banking financial companies (NBFCs) to 75% this quarter from 60%. Muthoot Finance further gained by 7% and Manappuram surged higher by 15%.
Finally, BSE Sensex closed at 20,758 up 45 points, while NSE Nifty closed at 6,171 up 3 points over the previous close.
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